Chapter 8, Problem P8.27APGA

Learning objective 6

1. Adjusted Balances $18,025

The December cash records of Davidson Insurance follow:

Cash ReceiptsCash payments

Date Cash Debits Check No. Cash Credit

Dec. 4 $ 4,240 1416 $810
9 550 1417 180
14 600 1418 630
17 1,900 1419 1,390
31 1,860 1420 1,490
1421 700
1422 600

Davidson’s cash account shows a balances of $17,450 at December 31. On December 31, Davidson insurance received the following bank statement.

Bank statement for December
Beginning Balance $ 14,100
Deposits and other Credits:

Dec. 1 EFT $ 350
Dec. 5 4,240
Dec. 10 550
Dec. 15 600
Dec. 18 1,900
Dec. 22 BC 1,400 9,040
Checks and other Debits:

Dec. 8 NSF 400
Dec. 11 (checks no. 1416) 810
Dec. 19 EFT 225
Dec. 22 (checks no. 1417) 180
Dec. 29 (checks no. 1418) 630
Dec. 31 (checks no. 1419) 1,930
Dec. 31 SC 10 (4,185)
Ending Balance $ 18,955

Additional data for the bank reconciliation follow:

a. The EFT cred was a credit of rent The EFT debit was an insurance payment
b. The NSF check was received from a customer.
c. The 51.400 bank collection was for a note receivable.
d The correct amount of check no. 1419, for rent expense. S1.930 Davidsons controlermstakenIy recorded the check for 51,390.
Requirements
1 Prepare the bank reconciliation of Davidson insurance at December 31, 2018.

2. Journal any required entries from the bank reconciliation.